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Generally, you want to hold long term growth stock/mutual funds/ETFs in a taxable account....

This might be a bit coarse. Ignoring the reasons for creating taxable, vs Traditional IRA, vs Roth IRA accounts (and perhaps Roth 401(k)s; I haven't studied those details, yet), but assuming an investor has each of the three accounts, these, I think are the optimal order of choices.

When money comes out of a Trad IRA, it's taxed at ordinary income rates, even if the major part of a withdrawal might have been from long-term cap gains. The same withdrawal from a taxable account would be taxed, substantially, at long-term cap gain rates. But the same withdrawal from a Roth would be untaxed. Thus, it seems to me that even investments that throw off mostly long-term cap gains are better off made in a Roth than in either of the other two types of accounts.

Eric Hines
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